The Hartford Leave experts discuss upcoming changes and expansions in 2020 to existing PFML state programs and the status of legislation on both the state and federal level.
Join host Laura Marzi, Group Benefits Chief Marketing Officer, with Kimberly Mashburn, National Accounts Lead, and Meghan Pistritto, Director Product Management at The Hartford.
Laura: Happy New Year, everyone. Thanks for tuning in to our latest Line on Leave podcast where we discuss the updates and trends in Paid Family and Medical Leave. I’m your host Laura Marzi and today we want to talk a little about the new year and what’s in store for PFML in 2020. Is it the law in your state? Will it be the law in your state? And what about a national program? Is the issue on the front burner – or any burner – in Congress?
Here to help answer those questions are Kimberly Mashburn who is the National Accounts Lead at The Hartford and Meghan Pistritto, who is the Product Management Director for Group Benefits Absence and Disability.
Laura: I thought we’d start with Meghan - can you bring us up to speed on anything new in 2020 for states that already have PFML laws?
Meghan: Absolutely. But first, I just want to say thank you for having me back, and happy new year! 2020 – We’re here – who thought we’d actually make it?! But second, as just a quick refresher on what PFML benefits generally allows for – depending on the specific state:
- Time off work for new parents who need time to bond with a new child – either through birth, adoption or foster placement.
- Time off work to care for a seriously ill family member.
- Time off work to support certain duty and health needs of a family member in the military.
- Time off work to address your own serious illness, injury or disability.
Right now there are eight states and the District of Columbia that have enacted a Paid Family Leave law. These states are California, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington state and, DC. Some benefits don’t become payable until sometime in the future - there will be changes coming to nearly all of them in some fashion. So let’s start with Washington State. It is one of the newer programs and it actually began paying benefits this January 1.
Washington D.C starts providing benefits beginning in July.
Also in July, California’s PFL benefit duration will increase from six weeks to eight weeks. So again, even the laws that have been enacted for some time now, are also getting in the game of making sure they’re competitive with the other states. We’re seeing changes in CA.
New Jersey has some extensive changes that start in 2020. The first thing employees will notice are higher payroll deductions as of January 1. This really is largely because – effective this July – benefits will be a little more generous. Paid Family Leave duration will increase from six weeks to 12 weeks. And the maximum weekly wage benefit will increase from $650 to $860. The replacement income benefit is going up because this year it will be based on 85 percent of the Individual’s Average Weekly wage, up to a maximum of 70 percent of the Statewide Wide Weekly Average. That cap had been up to 67 percent of the Statewide Weekly Average.
The same thing is happening in New York. So again, especially in the states that are next to each other, like New York and New Jersey, there’s a little bit of a competition going on in terms of creating these richer benefits. So in NY, the wage benefit will increase from 55 percent to 60 percent of the employee’s Average Weekly Wage. That pushes the weekly benefit from $746 to a max of $840 per week. As a result, employee deductions will also increase.
Laura: Ok so how big of an increase? If I work in New York, what’s that deduction going to look like?
Meghan: On average, we expect it to go up about $90 more a year – and that’s for employees who earn the Statewide Weekly Average or more. The yearly deduction will increase from about $107 to $196. But remember the benefits are increasing as well.
Laura: What about the newest states to adopt PFML – like Oregon and our own home state of Connecticut?
Meghan: So benefits won’t begin in those states for a few more years – 2022 in Connecticut and 2023 in Oregon. Both of those laws were just enacted in 2019. So right now, the states are working on developing the regulations and rules for their respective program. They are still, somewhat, a work in progress.
What I can tell you is that the Connecticut law requires the state in 2020 begin public outreach and education on the new PFML law. And in Oregon, the state has to issue a progress report to the legislature in February. So we’ll know a little more then.
And just a quick word on Massachusetts – our New England neighbor. It adopted its law in 2018 and benefits will begin in 2021. If you are an employer and were approved in the fourth quarter of 2019 for a private plan exemption, you do have to re-apply to the state for the exemption in the fourth quarter of 2020.
Laura: Thanks, Meghan. Great info. I know our employers and brokers appreciate the updates. They’ll have a better idea of what these developments mean for them.
So Kimberly, we just talked about the states that have the laws. Do we expect more states will add laws in 2020?
Kimberly: Thanks Laura. States have been very active in this arena over the last few years. As you know, the federal Family and Medical Leave Act guarantees does guarantee job protection for eligible employees who take time off for family or medical issues, but it is unpaid leave. As a result, states are creating their own programs that add an income replacement component as well as extending eligibility for more employees.
As you mentioned, Oregon and Connecticut adopted laws last year. They weren’t alone in trying. More than two dozen states introduced legislation and but only two of those states made it over the finish line before the legislatures adjourned.
But this is a new year and we expect more activity. A number of states will have PFML legislation introduced during 2020 or prior PFML bills that failed to move forward during 2019. States where we know we will see the early PFML activity include Illinois, Maine, Minnesota, Nebraska, New Hampshire, Pennsylvania and Vermont.
Colorado passed legislation during 2019 calling for a PFML study when the original legislation failed to gain the bi-partisan support. The outcome of that study will likely lead to legislation this year to establish a program. Hawaii released a study in November looking to better understand the funding mechanism behind a Paid Family Leave.
Laura: Wow, ok, so you’re definitely keeping a close eye on the statehouse activity, Kimberly. When we think about a national paid program, what’s been proposed so far there?
Kimberly: Good question, Laura. There certainly is no lack of activity, but we haven’t seen any formal action taken by Congress at this point. Most of the proposed legislation falls along party lines, but the topic of a national Paid Leave law remains bipartisan.
Laura: Ok, so what’s been proposed thus far?
Kimberly: The first is the Working Families Flexibility Act. This would allow private-sector employers to offer employees the choice to accumulate Paid Family and Medical Leave by opting for Paid Time Off instead of overtime pay when they work overtime. The bill would amend a current law that prohibits that.
There are two proposals which dip into Social Security funds. The Cradle Act would give parents the option to use some of their Social Security benefits after a birth or adoption to take one to three months of paid leave. The Economic Security for New Parents Act, this would give parents the option to use future Social Security benefits to take at least two months of Paid Leave and also permit parents to use their Social Security fund to pay for child care.
The next is the Family Act. This would give up to 12 weeks of partial income to not only new parents, but also those with sick family members or if they are themselves sick. It would be funded by a new tax on employees and employers. The new program would operate through a trust fund within the Social Security Administration.
There is a bipartisan plan, the Cassidy Sinema Plan which would fund parental leave or infant care expenses by utilizing the pre-existing Child Tax Credit (CTC). Parents would have the option of advancing up to $5,000 from the CTC up on the birth or adoption of a child and receive an adjusted CTC over 10 years. Low-income families who don’t qualify for the full refundable tax credit could advance their CTC benefit for the equivalent of 12 weeks of 100 percent wage replacement to be repaid over 15 years.
Laura: Wow, so Congress has a lot to consider. Can we expect action in the near-term do you think?
Kimberly: The term of this current Congress – the 116th – ends in January 2021. If we do not see any action on existing legislative proposals, it will have to be reintroduced in the new Congress. Keep in mind, during Presidential election years, things tend to slow any legislative activity in Congress, so we do not expect major action in 2020. But stay tuned – this remains a bipartisan topic across Washington and The Hartford will keep everyone updated.
Laura: Thank you so much to both of you for helping us usher in 2020 with great insight on PFML. And thanks to our listeners for your time as well. You can find this episode along with other Line on Leave podcasts and additional resources on this topic on The Hartford’s Paid Family and Medical Leave resource center. And the address for that is https://www.thehartford.com/pfml. Thank you so much for listening.
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